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Sunday, 26 February 2012

Corporate social responsibility or corporate performance?

In the Sunday Times today (unfortunately hidden behind a paywall) Dominic Lawson points out that Fred Goodwin, former head of RBS, was chairman of the Princes Trust and his company had extensive corporate social responsibility programmes; yet was that what society needed or did it need better business decisions? Of course there is a legitimate argument that good management and good corporate social responsibility are not mutually exclusive choices. I do think that genuine commitment to and success in each leads to success in the other: the attitudes of respect for colleagues and commitment to motivate people to achieve will lead to management success but will also lead to an attitude that is supportive of social responsibility. The problem arises when social responsibility programmes are used as a smokescreen to hide the blemishes on the company's face.

Good corporate social responsibility is a result of a sincere intent to engage with staff. One of the things that motivates staff is proven to be a sense that their employer cares about them and cares about the wider society. This also means listening to staff and being responsive to them and thinking about the consequences of your actions. So BP may have been active in promoting its involvement in green causes but its board must have been aware years before the Gulf of Mexico oil spill that there was criticism of the company's cost cutting culture and suggestions that it could compromise safety. If I read that in the press years ago then board members must have done so too. Did they not see some disconnect there? Good business management and good corporate social responsibility would have led to the same conclusion, that a cost-cutting culture was inappropriate and inimical to a safety-culture.

2 comments:

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Corporate Governance

About Me

I am a business consultant and writer living in London. An engineer, MBA and accountant, I worked as Director of Business Development for public companies in leisure and retail, involved in business planning, strategy, acquisitions and disposals.
I moved on to co-found a bookshop chain with former colleagues, and expanded it into internet bookselling.
My own books cover corporate governance, business planning, negotiating, effective financial management and dealing with insolvency and financial distress.